The companys Fixed Manufacturing Cost is $30,000 each month. In month 1, one unit is completed and
Question:
The company’s Fixed Manufacturing Cost is $30,000 each month. In month 1, one unit is completed and one unit is half completed [thus $20,000 of Fixed Manufacturing Costs are included in each finished unit under Absorption Costing]. In month two, the second unit is completed and a third unit is started and completed. All three units are sold in Period 2. Disregard sales and variable costs when completing the company’s income statements.
Period 1 Period 2
Beginning Work-in-process Inventory 0 a ________
Ending Work-in-process Inventory 10,000 b________
Beginning Finished-goods Inventory 0 c ________
Ending Finished-goods Inventory 20,000 d ________
Comparative Income Statements
Disregarding Sales Price and Variable Expenses
Period 1 Period 2 Total
Variable Costing Income (30,000) (30,000) (60,000)
Ending minus Beginning
Work-in-process inventory 10,000 e________ h________
Ending minus Beginning
Finished-goods Inventory 20,000 f________ i________
_________________________________
Absorption Costing Income 0 g________ j________
Note: ($60,000) represents two months of Fixed Manufacturing Costs.
Required
Fill in the appropriate spaces for lines a through j.
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ